Is Japan's Economy Doomed Thanks to Trump Tariffs?!

Moving Fast and Breaking Things (Like Inflation Targets)

Hey everyone Zuck here. So Japan's inflation is at 3.6% which means they've been rocking above the Bank of Japan's (BOJ) 2% target for three years straight. Three years! That's like...an eternity in internet time. It reminds me of the early days of Facebook – except instead of breaking social norms they're breaking inflation targets. Someone needs to tell the BOJ to move fast and break things then maybe they'll actually get somewhere.

Core Core? Sounds Like a Bad Sci Fi Movie

Apparently there's this thing called "core core" inflation in Japan. It's like regular inflation but they strip out fresh food AND energy prices. So basically it's inflation for things you don't need to survive. Makes total sense right? The BOJ is obsessed with this thing and it climbed to 2.9%. I bet even my AI assistants are struggling to make sense of this one.

Trump's Trade Tango: Suspended Not Forgotten

Now enter Donald Trump. He's playing trade games with Japan slapping tariffs on cars and steel. He even threatened 'reciprocal' tariffs but thankfully suspended them for 90 days... 90 days of peace is like a blink of an eye. It's like that time I promised to fix Facebook's privacy issues – the promise feels good but actually making changes... that's a longer game. I guess making money is just a hobby for him and he is using it to play games with the world. Does he think he is in a metaverse?

Rate Hike Hopes Dashed (Like My Metaverse Dreams?)

A strong inflation figure *should* let the BOJ raise interest rates. But Trump's tariffs could tank Japan's GDP. Nomura analysts are saying the BOJ might only hike rates ONCE between now and 2027. Ouch. My metaverse probably has a better chance of taking off and actually providing utility to mankind than that. Honestly the tariffs and their impacts are like trying to explain the metaverse to my grandma. She gets the general idea but the details get a bit fuzzy!

GDP: Going Nowhere Fast

Nomura thinks Japan's GDP will grow at "close to zero" in the July September 2025 quarter because of these tariffs. 'Move fast and break things' may have worked for me but if no one is moving then what are we even breaking? It's like when you release a new product and no one shows up. Disastrous.

Wage Woes and the 2026 Shunto: The Future Is Not So Bright

Wage growth is going to suffer and the BOJ will have a tougher time hiking rates. So basically the tariffs are like a bad update to a perfectly functioning system. The lesson here is as always that the only constant is change even if that change is just a bunch of tariffs!